Correlation Between Clicks and Growthpoint Properties
Can any of the company-specific risk be diversified away by investing in both Clicks and Growthpoint Properties at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Clicks and Growthpoint Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clicks and Growthpoint Properties, you can compare the effects of market volatilities on Clicks and Growthpoint Properties and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Clicks with a short position of Growthpoint Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clicks and Growthpoint Properties.
Diversification Opportunities for Clicks and Growthpoint Properties
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clicks and Growthpoint is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Clicks and Growthpoint Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growthpoint Properties and Clicks is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Clicks are associated (or correlated) with Growthpoint Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growthpoint Properties has no effect on the direction of Clicks i.e., Clicks and Growthpoint Properties go up and down completely randomly.
Pair Corralation between Clicks and Growthpoint Properties
Assuming the 90 days trading horizon Clicks is expected to generate 0.92 times more return on investment than Growthpoint Properties. However, Clicks is 1.09 times less risky than Growthpoint Properties. It trades about 0.1 of its potential returns per unit of risk. Growthpoint Properties is currently generating about 0.05 per unit of risk. If you would invest 2,453,783 in Clicks on August 31, 2024 and sell it today you would earn a total of 1,538,817 from holding Clicks or generate 62.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clicks vs. Growthpoint Properties
Performance |
| Timeline |
| Clicks |
| Growthpoint Properties |
Clicks and Growthpoint Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clicks and Growthpoint Properties
The main advantage of trading using opposite Clicks and Growthpoint Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clicks position performs unexpectedly, Growthpoint Properties can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Growthpoint Properties will offset losses from the drop in Growthpoint Properties' long position.| Clicks vs. Afine Investments | Clicks vs. RCL Foods | Clicks vs. Frontier Transport Holdings | Clicks vs. Astoria Investments |
| Growthpoint Properties vs. Deneb Investments | Growthpoint Properties vs. Standard Bank Group | Growthpoint Properties vs. HomeChoice Investments | Growthpoint Properties vs. ABSA Bank Limited |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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